Johnson & Johnson (NYSE: JNJ) is set to publish its December-quarter report on January 22, amid expectations for mixed results. The company, which has faced both challenges and tailwinds in recent years, is betting on its extensive drug pipeline and product launches to drive growth beyond 2025.
Last year, the healthcare giant’s stock experienced high volatility, marked by a series of ups and downs. The stock’s last closing price broadly matches JNJ’s value nearly four years ago. However, the company has been rewarding shareholders with regular dividend hikes over the past several years. It currently offers a yield of 3.4%, which is well above the S&P 500 average.
Q4 Report Due
Johnson & Johnson is expected to report fourth-quarter results on Wednesday, January 22, at 6:20 am ET. Wall Street analysts have forecast a 5% increase in revenues to $22.45 billion in Q4. However, the company’s adjusted profit is expected to decline to $2.04 per share in the final months of the fiscal year from $2.29 per share in Q4 2023.
From Johnson & Johnson’s Q3 2024 earnings call:
“Our performance once again reflects the unique breadth of our business and our commitment to delivering the next wave of healthcare innovation to patients around the world. It also reflects the work we have done to shift our pipeline and portfolio to high-innovation and high-growth markets. That work continues, which you saw with the recently completed acquisitions of Shockwave and V-Wave in med tech and Ambrx, Proteologix, and the NM26 bispecific antibody in innovative medicine.”
Last year, stable sales performance in the US and Europe outweighed weakness in Asian markets like China and Japan amid the economic slowdown. At the same time, healthy cash flows have enabled the drugmaker to increase research and development expenses, spending $5 billion in the third quarter alone. However, ongoing legal disputes over product safety and related settlements will remain a drag on the company’s finances in the near future.
Results Beat
Johnson & Johnson has consistently beaten Wall Street’s quarterly earnings estimates for over a decade. In the most recent quarter, both revenue and profit topped expectations. Third-quarter sales rose 5% annually to $22.5 billion, with the Innovative Medicine and MedTech business segments growing 5% and 6% respectively.
Meanwhile, adjusted earnings decreased by 9% year-over-year to $2.42 per share. For the whole of FY24, the company expects sales to be in the range of $88.4 billion to $88.8 billion, and adjusted earnings between $9.88 per share and $9.98 per share. On a reported basis, net income declined in double digits to $2.7 billion or $1.11 per share.
In Growth Mode
This week, the company announced the acquisition of Intra-Cellular Therapies, a biopharmaceutical company focused on the development and commercialization of therapeutics for central nervous system disorders, for around $14.6 billion. The deal follows a series of acquisitions the company carried out recently, including heart device maker Shockwave Medical and V-Wave, which develops treatments for heart failure.
JNJ has been languishing below its 52-week average price for more than a month. The stock traded lower in early trading on Wednesday.